Assessment Centres: Time for a Fresh Approach – Part 1
A significant number of companies worldwide use some form of assessment centre methodology to evaluate candidates for recruitment, development and promotion – and most seem satisfied with the process. A 2007 UK survey, for example, revealed that 90% of employers using assessment centres believe them to be an effective means of recruiting staff. But is that confidence misplaced? Recent studies suggest it may be.
First, a definition: An assessment centre is a methodology (not a location) in which participants are run through a variety of job-related exercises while trained assessors evaluate their behaviors. Created at Harvard, implemented by German intelligence in WWI, refined by the British and Americans in WWII, and legitimized for business by IBM in the 1950s, the assessment centre has long been held in high regard by HR professionals as an unbiased way to predict candidates’ future performance.
The methodology has served well for many years. Studies between 1966 and 2007 showed an incremental validity of about .40 over other methods such as cognitive ability tests, personality assessments, and interviews. This means that about 20% of job performance could be explained by results from the assessment center. Having such a strategic window into the future for organizations has been a real advantage for their talent management processes.
But a recent meta-analysis has found the validity of assessment centers to have fallen to about .27, which ranks below the predictive value of other, less sophisticated methods. This is clearly a concern as organizations can easily spend upwards of 6,000 USD/50,000 HKD per participant and more on these types of interventions.
What is contributing to this decline? Based on recent studies as well as anecdotal observations and trends on how organizations are currently employing this approach, there appears to be a number of factors at work:
Pressure to reduce costs – While organizations recognize and have benefited from the assessment centre approach and methodology, there is significant pressure to find ways to be more efficient and cost effective in their talent management practices. This has led to corner cutting and a disregard for best practices. There has been an alarming trend in the use of “assembly line” or “off the shelf” approaches that have commoditized this valuable process.
Unqualified assessors – More and more professionals claim to offer this type of service without having the proper credentials. And when companies try to take the service in-house, most lack the appropriate training and resources (not to mention, time) to do the job properly.
Irrelevant competency frameworks – Talent competency models need to be refreshed. Many organizations are working off of frameworks that have been around for three or more years or they are electing to use off-the-shelf models. Either way, they need to assess whether or not the capabilities in these models are reflective of what success looks like in their organizations today and where the organization is moving strategically.
Outdated delivery modes – Traditional methods of administering the evaluations simply do not align to the virtual, real-time nature of today’s professional jobs. Many organizations still employ a “paper/pencil” approach where participants are handed instructions for an exercise or asked to respond to a series of paper memos. Such an approach damages the relevance of the experience from a candidate standpoint.
Increasingly I see the impact of these factors as I work with organizations that are trying to clean up the mess of failed assessment programs and with participants who have had bad experiences and are skeptical whether they will get valuable insights from another leadership assessment. How can organizations refresh their assessment centre methodology to create a more realistic experience for candidates and gain relevant insights for their leadership development efforts? I’ll answer those questions in Part 2 of my blog: Assessment Centres: Time for a Fresh Approach.
 Personnel Todayhttp://www.personneltoday.com/articles/21/08/2007/41933/employers-rate-assessment-centres-as-worth-the-high-cost.htm
 “Validity of assessment centres for personnel selection”, Thornton et al, Human Resource Management Review, 2009